Wealth Resource Center

Protect Your Family's Financial Records

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Don't lose information to a disaster or an identity thief

08.28.2013

Brought to you by: Beacon

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You may have an alarm system for your home, and you probably make a point of locking your house and car doors. But do you take the same care to secure your financial records? Adopting the right security precautions puts you in the best position to weather the storm when the worst happens, whether that's a natural disaster or a case of identity theft. Here's how to safeguard your family's financial records.

Create strong passwords for online accounts. When setting up online banking or investment accounts, avoid choosing easily guessed passwords such as your initials, your birth date or your child's or pet's name, says Leslie E. Linfield, executive director of the Institute for Financial Literacy, a South Portland, Maine-based nonprofit focused on promoting effective financial education and counseling. Effective passwords include a variety of characters and are at least eight characters long (longer is better). Linfield recommends using a combination of lowercase letters, uppercase letters and numerals.

Store important documents securely. Keep copies of your Social Security card, tax returns, will, power of attorney and other critical financial papers in a safe deposit box. If you live in an area that's prone to natural disasters such as flooding, earthquakes or wildfires, Linfield recommends creating an emergency “go kit” with these documents as well as copies of your marriage certificate and insurance information. "Scan those documents and put them on a flash drive in a three-ring binder along with important phone numbers, like those for your banker and insurance agent," she says. Online backup services like Carbonite, Mozy and Jungle Disk can also store important documents securely online.

Use secure web connections to access financial information. Never use public Wi-Fi hot spots to check your bank or investment accounts—these connections are easy pickings for hackers. Instead, log on through a secure web connection, such as a password-protected home network. Then look for signs that the bank's website is secure, such as a URL that starts with "https" instead of "http" or a "locked" icon in your browser's status bar. "If you have any questions about whether your connection is secure, call the institution and verify what you should be looking for," Linfield says. When you've completed your session, log out rather than just closing the browser window.

Don't click suspicious email links. Be wary of emails from your bank or other financial institution. Even if the message looks legitimate, it could be a phishing email designed to steal sensitive information or lure you to a counterfeit website. "A bank is never going to ask you through email for your Social Security or account number," Linfield says. Instead of clicking an email link, call the bank or log into your account by typing the bank's secure URL yourself.

Shred unnecessary financial papers. If mail such as credit card offers or bank solicitations gets into the wrong hands, you could fall victim to identity theft. According to Linfield, medical identity theft is also on the rise, so take care with medical and insurance documents, too. Store tax returns and W2s for seven years in case you're audited. Prevent identity theft by shredding credit card bills once they're paid and bank statements after a year.

Disclaimers

This content is educational in nature and is not an advertisement for a loan or business solicitation. It does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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